Gold Soars as US Economy Exceeds Expectations with 2.2% Q2 Growth

The US economy expanded by 2.2% in Q2, exceeding initial expectations and beating its first-quarter growth of 2.1%. The data from the U.S. Bureau of Economic Analysis (BEA) showed a revision to the preliminary reading of 1.5%. This indicates a stronger-than-expected performance.

The BEA also reported that inflation cooled in Q2, with the GDP Price Index rising 6.1% compared to an initial estimate of 6.4%. The core PCE index, which excludes volatile food and energy prices and is the Federal Reserve's preferred inflation gauge, increased by 0.2% in August.

The core PCE annual rate rose to 3.0%, slightly below consensus estimates for a 3.3% increase. Headline inflation was also relatively muted, with a 0.3% rise in August against forecasts for a 0.4% increase. In the last 12 months, headline inflation stood at 3.4%, lower than predicted.

The release of this data has prompted a surge in gold prices, which shot to session highs following the better-than-expected GDP and PCE figures. Spot gold was trading at $4,213.11 per ounce for a gain of 0.74% on the daily chart.